Cummins’ (CMI) stock is up over 15% so far this year and the engine-maker’s shares should continue to rev higher due to a surge in demand from both the civilian and military markets, said Don Townswick, head of equities and strategy at Conning. ‘They are going to succeed because of increased fiscal spending going forward even though they missed their estimates historically,’ said Townswick. ‘If you look at the entire group they have done well since last September.’ Speaking of military spending, Townswick is also bullish on Lockheed Martin (LMT), down 2% year-to-date. Townswick said the defense contractor is improving its satellite business, building them at a lower cost in 40% less time. ‘Also, they have relatively low leverage and they generate a significant amount of free cash flow and have done it consistently for several years,’ said Townswick.
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